10830-10800 IS THE NEXT SUPPORT ZONE; 11141 IMMEDIATE HURDLE

10830-10800 IS THE NEXT SUPPORT ZONE; 11141 IMMEDIATE HURDLE

WORLD MARKETS

US markets were shut yesterday for Labour Day holiday.

On Friday, Dow and S & P 500 gained 0.2% and 0.1% respectively while Nasdaq fell 0.1%.

China and the U.S. kicked off a new round of trade tariffs on one another’s imports over the weekend, despite signs that talks could resume in September. Media reports yesterday suggested that China had lodged a complaint against the U.S. with the World Trade Organization.

Brent crude fell 64 cents to $58.61 a barrel while U.S. oil fell 33 cents to $54.77.

Yesterday, European markets gained upto a percent with FTSE on the top as manufacturing data in both China and Europe showed slight improvement. Eurozone manufacturing PMI rose to 47 in August from 46.5 in July.

U.K. manufacturing PMI nosedived at its fastest rate in seven years, falling to 47.4 from 48.0. U.K. lawmakers will bring forward legislation this week seeking to block the possibility of Britain leaving the European Union without a deal.

AT HOME

After falling about two third of a percent in the morning session, benchmark indices saw a smart rebound in noon trade to end higher by seven tenth of a percent, breaking two-day losing streak. Sensex settled at 37332, up 263 points while Nifty added 75 points to finish at 11023. BSE mid-cap and small-cap indices climbed 1% and 0.8% respectively. BSE Metal index gained 1.8%, becoming top gainer among the sectoral indices, followed by 1.7% higher FMCG and Healthcare indices. Power and Capital Goods indices were the top losers, down 0.6% and 0.5% respectively

FIIs net bought stocks, index futures and stock futures worth Rs 1163 cr, 964 cr and 1110 cr respectively. DIIs were net buyers to the tune of Rs 1502 cr.

Rupee appreciated 40 paise to end at 71.40/$.

For the week, Sensex and Nifty gained 1.7% and 1.8% respectively, breaking two week losing streak. For the month of August, Sensex and Nifty fell 0.4% and 0.8% respectively, extending the losing streak to third straight month.

Finance minister Nirmala Sitharaman on Friday announced consolidation of 10 state-run lenders into four bigger banks. PNB, OBC and UBI will be brought together to form the second-largest state-run bank in the country. The second merger will be between Canara Bank and Syndicate Bank, which will make it the fourth-largest public sector lender. In the third, UBI will be merged with Andhra Bank and Corporation Bank to build India’s fifth-largest public sector bank. Indian Bank will be merged with Allahabad Bank to make India’s seventh-largest PSB.

India's GDP growth slipped to 25 quarter or over 6-year low of 5% in April-June quarter, as against 5.8% figure in Q4 FY19 and 8% in Q1FY19.

August GST collections came in at Rs 98200 cr, lowest this fiscal and as against 1.02 lakh cr in July.

July eight core industries growth stood at 2.1% vs 0.7% in June. August Nikkei manufacturing PMI came in at 15-month low of 51.4 vs 52.5 in July.

Maruti August sales dipped 32.7% y-o-y to 1.06 lakh units. M & M auto sales fell 25% to 36085 units while tractor sales were down 17% at 14187 units. Escorts tractor sales fell 16.1% to 4035 units. Tata Motors reported 49% fall in domestic sales at 29140 units. Eicher Motors motorcycle sales fell 24% to 69377 units.

OUTLOOK

Today morning, Shanghai is little changed while Hang Seng and Nikkei are trading with modest gains. SGX Nifty is trading around 10940, suggesting around 120 points lower start when compared with Friday's close of Nifty future.

In Friday's report we had said that 10915 was the immediate support on the hourly chart upon breach of which, 10830, followed by 10800, the 61.8% and 67% retracement levels of the recent 10637-11141 upmove, would be next downside targets/supports to eye.

Nifty broke 10915 support and touched a low of 10874, from where it reversed to touch a high of 11042 before closing at 11023 but is set to open near 10900 today.

10830, followed by 10800, the 61.8% and 67% retracement levels of the recent 10637-11141 upmove, continue to be support levels to eye.

11141, the top made last week, continues to be immediate hurdle.